The AI forecast: What CMOs need to know

• With artificial intelligence rapidly redefining Web3.0 and accelerating technologies such as the metaverse, blockchain and NFTs, marketers must think big and act fast to close the gap in organisational capabilities.
• AI’s real potential is in areas such as predictive analytics for data-driven marketing, and new businesses like data-as-a-service.
• Brands have to consider how AI can support their organisations, what to plan for and where they are headed.
• Marketers who lack resources can turn to AI for help to potentially be in multiple markets and address many more segments.

Why it matters

To ride the AI wave, CMOs should have a roadmap to unlock new value to reap early mover advantages and build their brand, as the traditional marketing funnel will lose relevance when cookies and third party data are phased out.

Takeaways

• AI can deliver souped-up versions of first party data by combining with other datasets to cover audience segmenting, targeted ads.
  
• Searches will become new/original with AI – this is an opportunity for brands to differentiate and be niche in the way they connect.
• AI-aided change will focus on balancing cost savings with net new revenue, and how to implement AI features in existing platforms.

Big gains for marketing are to be had as AI rapidly sweeps across the global economy of 2023 and beyond, redefining Web3.0 and accelerating all new technologies at scale, whether it be the metaverse, blockchain or NFTs.

It's not just hype, Totem founder Chris Baker said at the recent eTail Asia 2023 conference in Singapore, and senior marketers must “think big” to close the gap in organisational capabilities – and make it fast.

“AI is exploding in a million different directions and it is going to impact everything," said Baker.

"For marketers, there are incremental things around content. But beyond that, we are also looking at things like dramatically changing the nature of our business.”

He observed that there is high organisational capability with respect to things like ChatGPT for content creation.

“All of our (marketing) teams can quickly jump in and use these tools relatively effectively. Whether or not they can produce great content is a secondary question."

However, the real potential lies in areas such as using predictive analytics for data-driven marketing and moving into new businesses such as data-as-a-service offerings. Myriad possibilities are also emerging, such as nocode app-building and one-to-one customer marketing at scale.

Baker said, “There is a gap that exists organisationally within the marketing team for the ability to dive in and engage with things like predictive analytics and reimagining our businesses. Senior marketers need to figure out where these gaps exist.”

Here's what CMOs should know to properly ride the AI wave:

1. Make a roadmap to unlock new value

Baker said some of Totem’s recent work with brands revolve around creating roadmaps for the journey ahead. These roadmaps take two things into account:

• “The things we currently do as an organisation and figuring how AI can support that.”
• “Figuring out on an organisational level what to plan for, what is our real intention and where we need to go.”

“As an organisation, you need to grapple with and understand both the current market as well as the future view of potential opportunities.”

CMOs, he reckoned, must address these timely and crucial questions:

• What is currently in demand but is costly to deliver?
• What new businesses can the organisation move into?
• What data does the organisation possess that could form the core of a new offering?

2. Early mover advantages are to be had

A “sweet spot” has now opened for brands using AI to “expand very rapidly to be everywhere all at once”. This boils down to the tantalising potential offered by AI to deliver souped-up versions of first party data by combining with other datasets, extending it to areas such as audience segmenting, targeted ads and workflows for conversion.

“When it comes to any marketing endeavour, we tend to take our spots because we lack resources for bandwidth. What AI helps us to do is potentially be in multiple markets, addressing not four personas or four segments but rather 400 all of a sudden.”

He added that bigger organisations will be well-positioned to do that and make “major gains in the short term".

"That comes with combining really strong datasets and using retargeting tools for serving ads out."

3. Average content will no longer cut it

Baker said one oft-asked question about AI revolves around the future of search. His prediction is for search results to average toward brands with high share of voice.

“With search, two things are happening at once. On one level, large market leaders will benefit from share of voice. In future, the likelihood is that larger brands are going to have a higher share of voice and always going to land on top of the pile when initial returns on search are served up.”

But at the same time, he said it’s important for both smaller and larger brands to understand “the gains that can be had by differentiation, whether it be functional or psychographic”.

Currently, 15% of all Google searches at any given time are new and original but Baker predicted almost all future searches will become niche or novel.

“This is an opportunity for brands to differentiate and be really niche and nuanced with the way that they connect.”

With AI, content quality will inevitably “average up” as smaller brands see the most lift in quality as AI levels the playing field for content creation.

“Currently, a lot of brands, especially smaller ones, have not been able to create great content at scale. While I think most of the gains to be had are going to large brands through owned share of voice, hope is not lost. All brands can do well to orchestrate the connection between unique interest and personal, functional needs to search output.”

4. Build the brand

Brand moments will matter more than ever as cookies and third party data are phased out, rendering the traditional marketing funnel less relevant.

“This funnel concept is really a holdover from Web1.0, where a user would go through and hit a number of sites along the path to purchase. A large part of the middle of the funnel can be taken out. The work of marketing is going to take place on top of the funnel, more for larger brands to create big impact and to create preference."

As consideration gets throttled, brand moments and brand preference will make a world of difference.

The shift towards conversation also makes brand building pertinent.

“If you think about it, once we switch to a more chat-focused UI, it will be hard to interrupt with ads on the path to purchase to steer attention.”

5. Be human

Ironically, with AI, consumers are set to seek out live events and human connection. Authenticity and human empathy will be important, along with being upfront with consumers about the organisation's AI practices.

Baker’s predicts that “consumers are going to covet human experiences and brands”.

“That is going to become where the real value rests.”

He said, “Externally, that means creating events and having genuine human interaction. Internally, the way we plan and create mission statements and ethics around AI, it means having a code of conduct around what we do and won’t do with AI.”

Change is coming

In conclusion, Baker shared some transformation paradigms for senior marketers to prepare for the AI-aided change ahead:

• Cost versus revenue: “Separating cost savings versus net new revenue, how are you going to balance these two things as an organisation?"
• Inside versus outside: "This is something (real estate marketplace) Zillow did a good job of to approach transformational AI. They created two champion teams within the overall organisation, one to focus on outfacing communications and customer engagement, the other to look at data as the internal team setting up the framework and tools within the company."
• Existing platforms: “More than buying or creating massively complicated systems, tools and processes, it’s incumbent for brands to look at the platforms you already use and do scorecards. How capable is Salesforce or Hootsuite or other tools towards implementing AI features? That’s a good place to start.”

WARC is a proud media partner of eTail Asia 2023.

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